Running a dental practice is not just about keeping smiles bright. It is also about keeping your financials healthy. Just as you schedule regular checkups for your patients, your practice needs financial checkups throughout the year. Here are some simple ways to make sure your practice stays in top shape and takes full advantage of tax planning opportunities.

1. Review Your Financial Statements and Trends

Start by reviewing your recent financial statements. This does not need to be complicated. Focus on identifying trends:

• Are collections steady, improving, or declining?
• How do key expenses compare to industry benchmarks such as staffing costs, lab fees, and dental supplies?
• Are there any unusual spikes or dips that require attention?

Identifying numbers that fall outside the norm early can help prevent larger issues later.

2. Revisit Your Retirement Plan

Your retirement plan is more than a savings vehicle. It is also a powerful tax planning tool. Consider the following:

• How much of the contributions are allocated to you as the owner versus your staff?
• Is this plan still the best fit for your practice?
• Are you on track to maximize contributions this year?

If you do not yet have a plan in place, this may be the right time to explore your options. Many retirement plans offer tax credits for new adopters, allowing you to save both now and in the future.

3. Project Cash Flow and Profit in the Fourth Quarter

Cash flow and taxable profit are not the same, and both are important. During the last quarter of the year, project your cash flow and profit through year end. This allows you to make informed decisions about:

• Equipment purchases you may want to accelerate for tax deductions
• Adjustments to compensation or team bonuses
• Additional retirement plan contributions before year end

Taking a proactive approach gives you the opportunity to optimize your tax position before the year closes.

4. Revisit Your Tax Projection

Waiting until April 15 is not a strategy. Review your projected tax liability now:

• Do your withholdings need adjustment?
• If you are projected to owe, when should you make a payment to avoid penalties?

Addressing this early prevents surprises and provides opportunities to legally reduce your tax burden.

5. Make Financial Checkups a Habit

Just like patient checkups, regular financial reviews keep your practice in peak condition. A few times each year, review trends, revisit your plans, and project your financial outcomes. This helps you stay ahead of potential issues, maximize tax deductions, and position your practice for long term success.

Lauren Holt, CPA
Holt Practice Advisory
lauren@holtpracticeadvisory.com

www.holtpracticeadvisory.com

Posted in Blog